A C Ward & Son Ltd v Catlin (Five) Ltd and Others
| Jurisdiction | England & Wales |
| Judgment Date | 19 November 2008 |
| Neutral Citation | [2008] EWHC 3585 (Comm) |
| Date | 19 November 2008 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | No. 2008 Folio 106 |
[2008] EWHC 3585 (Comm)
IN THE HIGH COURT OF JUSTICE
COMMERCIAL COURT
QUEEN'S BENCH DIVISION
St. Dunstan's House
His Honour Judge David Mackie QC
No. 2008 Folio 106
MS. R. SABBEN-CLARE (instructed by Rosling King) appeared on behalf of the Claimant.
MR. D.TURNER (instructed by Reynolds Porter Chamberlain) appeared on behalf of the Defendants.
(As approved by the Judge)
JUDGE MACKIE:
This is an application for summary judgment by defendant insurers. The claimant insured is a member of a large group of companies. It operates, amongst other things, a warehouse in West Thurrock. Over the weekend of 17 th and 18 th March 2007, professional burglars broke into the warehouse and stole about £450,000 worth of cigarettes and alcohol. None of this was recovered. The burglars cut through at the first floor level of the warehouse which then led them on to the mezzanine level where the stock was stored. The insured had a Multiline Commercial Contract of Insurance, covering it for theft from secure storage areas up to a limit of £1.5 million. It made a claim. After investigation, insurers refused to pay on a variety of grounds relating to security protection and alarm measures.
Proceedings were brought and insurers now bring this reverse summary judgment application on really two grounds. As the insurers see it, these are knock-out blows which, once landed, will bring a potentially very expensive case to an end. The claimant insured says that the case is not suitable for summary judgment because of the facts which need to be explored and also that, as a matter of law, insurers' grounds have no merit.
The matter was heard by me on Friday, ably assisted by submissions from Mr. Turner from the insurer and Ms. Sabben-Clare for the insured. The application proceeded on the basis of bundles of documents exhibited through witness statements from Miss Squire for the insured and from Miss Percy for the insurers. At the end of Friday I had intended to give short reasons and, if appropriate, give directions for trial, but it was submitted to me by Mr. Turner that resources had been thrown into this application and it may be helpful for me to examine the issues at a little greater length, which is what I have now sought to do.
There is no dispute about the approach to summary judgment. The defendants can only succeed if they can show the claimant has no reasonable prospect of success. The approach is helpfully summarised in the now quite well-known judgment of Lewison J. in J.D. Wetherspoon v. Van de Berg [2007] EWHC 104(Ch). Para.of that judgment contains a series of propositions which can be taken as incorporated into this judgment. Both sides developed the theme from the case law arising on summary judgment, but there is nothing in those cases (which are mainly of illustrative value) which affects the approach as summarised in the White Book and in Wetherspoon.
Mr. Turner emphasises the views expressed by the Commercial Court Working Party, in particular at paras.8and 88 of their report. Paragraph 8quotes from the dissenting speech of the late Lord Hobhouse in BCCI where he refers to the fact that it can be submitted with force that large cases are just the kind which most strongly cry out for the exclusion before trial of anything that is unnecessary for the achievement of a just outcome for the parties. Mr. Turner refers to the Working Party's recommendation that Lord Hobhouse's views should guide Commercial Court judges in their approach to applications for summary judgment. I bear that in mind.
I also bear in mind the submission now encapsulated in a case that was not cited to me because it only appears in the edition of Lloyd's which has hit my desk this morning. In Trident Turboprop, Aikens J. says at para.28:
“On an application under CPR 24, the court should decide issues of construction of contracts provided it is satisfied that it has before it all the evidence necessary for the proper determination of that question and the parties have had an adequate opportunity to address it in argument.”
He cites a passage from the judgment of Moore-Bick L.J. in ICI Chemicals. So there is no doubt that that is the approach to be taken where it is possible. However, as will become clear, it seems to me that there are some difficulties in achieving that eminently desirable object, in a smaller case where questions of fact are intertwined with those of law.
I approach this application by reference to the issues actually argued rather than to the lengthy list of composite issues. Those are the extracts from the composite issues to be found at para.13(a) to (f) of Mr. Turner's skeleton argument for insurers.
Before turning to those issues, I need to refer to the policy, to those facts agreed or not greatly in dispute and those which, on the insured's case, need to be investigated further. The policy starts with the schedule. The schedule records that there are four insured. That is because the insured, A.C. Ward, is part of a group and joined this policy after its inception. The policy and the schedule cover four different companies for, amongst other things, theft. In section C, Theft Insurance, there is reference to a “Protection Maintenance Warranty” with some premises and stock of cigarettes and tobacco being referred to under item numbers. There is a Burglar Alarm Maintenance Warranty. Against the entry “Make & type of Burglar Alarm System”, there are typed the words “Not provided”. The insured says that the absence of the provision of the make and type of burglar alarm means that the Burglar Alarm Maintenance Warranty does not apply. The insurer disagrees.
Turning to the policy —and I refer only to those provisions which have been relied on expressly by the parties, but naturally I look at the policy in context and as a whole —one of the recitals provides that:
“The Due Observance and fulfillment of the terms and conditions of this Insurance in so far as they relate to anything to be done or complied with by the Insured shall be a condition precedent to any liability of Insurers to make any payment under this Policy”.
Under “Memoranda”, we find “This policy is subject to the following clauses”, and at 3:
“Whenever and wherever it is stated hereafter that a particular Section of the Policy of Insurance is subject to a Warranty it is hereby declared and agreed that the said Warranty shall be deemed to apply to the whole Policy of Insurance and not just the particular Section of the Policy, unless otherwise stated.
A Warranty is a fundamental Term or Condition of the Insurance the breach of which voids the Contract from the time of the breach. If circumstances change which affect the Risk to the extent that the Insured may not be able to comply with any Warranty the Insured has a strict duty to give immediate notice to the Insurers. Failure to do so may also result in the voidance of the Contract.”
That is a provision upon which some emphasis is placed by the insured when contending that the warranties I shall come to are warranties in the strict sense and not suspensive conditions.
The General Conditions provide at 1:
“The Policy, Schedule and Endorsements shall be read together as one contract and any word or expression to which a specific meaning has been attached in any part of the Policy or the Schedule or of the Endorsements shall bear the same meaning wherever it may appear. Furthermore, the Proposal and/or the particulars in writing by which the Insured has applied to Insurers for an Insurance in the terms stated in this Policy and which the Insured has agreed shall be the basis of this Contract shall be held to be incorporated herein.”
Under the Special Conditions, condition 1 provides:
“The Insured shall not without permission from the Insurers make or allow any material alteration to the Premises and shall take all reasonable precautions for the safety of the Property Insured.”
The insured contends that this is an indication of the level of obligation to take precautions placed upon it. The insurer says that that is not the case because special condition 1 applies to the premises all the time and not to the more limited circumstances addressed in the warranties to which I now turn.
Under the heading “Warranties applicable to theft insurance… applicable only if specified in the policy schedule”, there are two warranties. First the Protection Maintenance Warranty, and, secondly, the Burglar Alarm Maintenance Warranty. The relevant parts of the Protection Maintenance Warranty provide:
“It is warranted that —
(a) the whole of the protections provided for the safety of the insured property shall be maintained in good order throughout the currency of this insurance and that they shall be in full and effective operation at all times when the Insured's premises are closed for business and at all other appropriate times, including when the said premises are left unattended, and that such protections shall not be withdrawn or varied to the detriment of the Interest of Insurers without their consent.”
After a sub-provision relating to keys, appear the words:
“All defects occurring in any protections must be promptly remedied.”
The Burglar Alarm Maintenance Warranty provides:
“It is warranted that —
(a) the premises containing the Insured property are fitted with the burglar alarm system stated in the Schedule, which has been approved by the Insurers and that no withdrawal, alteration or variation of the system, or any structural alteration which might affect the system shall be made without the consent of the...
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